Bitcoin Above $63k, Following Today’s CPI Report

Key Points

• BTC’s price just raced above $63k, as today’s CPI report was released.
• The report notes that the inflation rate for April eased to 3.4%.

Bitcoin’s price at the moment of writing this article is above $63k as April’s CPI is here. The coin is up over 3% in 24 hours on CoinMarketCap.

The CPI report has landed, and shows inflation eased to 3.4% in April from a year ago, which was in line with economist expectations.

The CPI report reveals the following:

• U.S. consumer price index rises 0.3% in April, below 0.4% forecast
• Core CPI, which omits food & energy, increased 0.3% in April, matching the forecast.
• 12-month rise in CPI slows to 3.4% from 3.5% in the prior month.
• The increase in core CPI in the past 12 months slips to 3.6% from 3.8%.

❖ U.S CPI (MOM) (APR) ACTUAL: 0.3% VS 0.4% PREVIOUS; EST 0.4%

❖ U.S CPI (YOY) (APR) ACTUAL: 3.4% VS 3.5% PREVIOUS; EST 3.4%

❖ U.S CORE CPI (MOM) (APR) ACTUAL: 0.3% VS 0.4% PREVIOUS; EST 0.3%

❖ U.S CORE CPI (YOY) (APR) ACTUAL: 3.6% VS 3.8% PREVIOUS; EST 3.6%

— *Walter Bloomberg (@DeItaone) May 15, 2024

Investors have been eagerly waiting for the data for clues on when and how often the Fed might cut interest rates this year.

The past three CPI releases have been surprisingly hot and caused investors to pull back expectations for interest-rate-cuts.

WSJ noted recently that Karim Chedid, investment strategist at BlackRock said earlier that they are seeing inflation volatility remaining and their base case is that higher for longer was still a theme for rates.

The PPI index, out the other day, rose more than expected in April.

PPI report showed a 0.5% increase for the month

Yesterday’s PPI reports showed that wholesale prices jumped more than expected in April. The producer price index, PPI, a gauge of prices received at the wholesale level, increased 0.5% for the month, according to the Labor Department’s Bureau of Labor Statistics.

This was higher than the 0.3% Dow Jones estimate. As CNBC noted, the March reading was revised from an initially reported 0.2% gain to a decline of 0.1%.

The core PPI also rose by 0.5% compared with the 0.2% Dow Jones estimate. Excluding trade services from the core group showed a 0.4% increase on the month and 3.1% on a 12-month basis – this was the highest level since April 2023.

On a year-over-year basis, the wholesale inflation rose 2.2%, the highest in a year. The core PPI inflation was at 2.4%, the biggest annual move since August of last year. CNBC noted that both these numbers were in line with Reuters’ estimates.

Chris Larkin, managing director of trading and investing for E-Trade from Morgan Stanley noted that sticky inflation looked downright stuck after a much hotter-than-expected inflation reading.

He said that with last month’s numbers revised lower, the report may not have been as much of an upside shock as it first appeared to be.

Services prices boosted the wholesale inflation, rising 0.6% and accounting for about three-quarters of the headline gain. The final demand goods index increased 0.4%.

Scott Melker also addressed the hotter-than-expected numbers on his X account asking why the Fed would cut again.

Inflation coming in a bit hot again.

Why would the Fed cut again? Can someone tell me please? https://t.co/VG7BLBTJ60

— The Wolf Of All Streets (@scottmelker) May 14, 2024

Policymakers have been saying in recent days that they expected inflation to trend lower through the year.